Medicare is a huge benefit for those who’ve earned access to it. However, there could be situations where it might be more beneficial for you to delay or eschew Medicare altogether. But you want to be sure it’s the best move, so read this comprehensive breakdown.

Is Medicare mandatory for eligible people?

Medicare is a type of government help that you contribute to with your taxes when you work. When you turn 65 or if you have specific health problems, you can get healthcare support from different parts of Medicare.

Even though you don’t have to sign up for Medicare, there are times when it’s given to you automatically. Declining Medicare coverage might need some work.

Why would you want to opt out of Medicare?

If you’re considering waiting on Medicare, talk about the good and bad sides with your current insurance company, the person who represents your group, or the people you work for. It’s key to understand if your current plan goes together with Medicare and how it does that. This way, you can pick the best and most complete coverage.

There are a few reasons why someone would decide not to take Medicare, and a few that come to mind are listed below.

  • You will continue to work past 65 and like your current employer coverage.
  • You have Veterans Affairs benefits.
  • You have an ACA plan and think it will be cheaper to keep.
  • You are very healthy and don’t need insurance, and I don’t even take prescription drugs.
  • You have an HSA and want to continue contributions.

Let’s examine these common questions people ask when thinking about declining Medicare.

Working past 65 – Employer coverage

That’s great if that’s what you choose to do. Depending on your group coverage, you may delay Medicare until you quit working.

You should check with your benefits administrator to determine if your employer insurance is considered creditable coverage to Medicare. If the employer insurance isn’t regarded as creditable, you’ll be penalized when you start Medicare.

Veterans Affairs benefits

VA coverage is considered creditable for Medicare’s Part D Prescription Drug Plan. However, health coverage isn’t regarded as creditable.

Suppose you’ll never use a doctor who doesn’t participate in the VA system. In that case, you can forego Medicare Part B.

However, most veterans want to have the added coverage of a civilization doctor at some point. They’ll be penalized if they did not take Part B when they first became eligible and decide to take it later.

Unfortunately, this is a situation seen far too often. When veterans need additional coverage, the penalties have made it unaffordable.

ACA coverage

If you’re receiving a subsidy based on income, an ACA plan may appear cheaper. Once you’re eligible for Medicare, you no longer qualify for the supplement. This would then force you to pay the total price of the plan, which will be considerably more expensive than Medicare.

In addition, most ACA plans will drop you when you turn 65 and are eligible for Medicare.

Healthy, don’t need insurance, and don’t take prescription drugs.

That’s fantastic. Unfortunately, as we age, we don’t get healthier. If you don’t have creditable coverage and don’t take Medicare, you’ll be penalized when needed.

We see this statement most often when someone is first eligible for Medicare.

HSA contributions

You must opt out of Medicare if you’re on HSA insurance and plan to continue contributions. Once you decide when you plan to start Medicare, it’s recommended by The CMS to stop contributions 6 months before your Medicare coverage begins to avoid tax penalties.

Can you opt out of Medicare coverage?

Medicare Parts A, B, and D all have penalties. The penalties apply if you don’t start Medicare or have creditable coverage.

The penalties for Medicare Part A, Part B, and Part D are all calculated differently.

The fines for not signing up for Medicare or signing up late can be just as puzzling as understanding which parts of the program you must have. The fines for not joining when you can first get Medicare vary depending on the program.

Opting out of Medicare Part A without credible coverage

If you decide not to join Medicare Part A when you can, you might get a fine. The fine changes depending on why you didn’t join. If you just decided not to join when you could, the amount you pay each month might increase by 10%. You have to pay this higher amount for twice the years you didn’t join. For instance, if you wait two years, you’ll pay the extra fee for 4 years after you join.

Opting out of Medicare Part B without credible coverage

The fine for Medicare Part B is a bit different from Part A. If you decide not to join Medicare Part B when you’re first allowed to, the fine could stick around much longer than the Part A fine.

The Part B fine is 10% of the usual cost for every year you didn’t join, and you’ll need to pay this extra fee as long as you have Medicare.

For instance, if you waited a year after you could’ve joined Part B, your payment will go up by 10% for as long as you have Medicare. If you wait two years past the allowed time to join, your payment will rise by 20% for the whole time you’re on Medicare.

Opting out of Medicare Part C without credible coverage

Medicare Part C or Medicare Advantage plans, is a choice you can make, and it doesn’t bring fines. However, there might be fines for joining the parts of Medicare included in your Medicare Advantage plan later than you should.

Opting out of Medicare Part C without credible coverage

Medicare Part D isn’t something you have to do, but there are still fines for signing up late. If you don’t sign up during the first time you can, you’ll have to pay a fine. This fine is 1% of the premium everyone pays for Medicare, and you’ll have to multiply it by the number of months you didn’t have Part D.

In , the average premium is $31.50, which changes yearly. It will be rounded to the nearest $0.10 if you need to pay the fine. This fine gets added to your monthly Part D payment for the whole time you’re on it.

If you don’t agree with the fine they say you need to pay, you can say you disagree, but you still have to pay the fine and the regular payment. If you don’t pay these, your drug coverage plan might stop covering you.

What is credible coverage?

For a health plan to count as creditable coverage for Medicare, it needs to give you benefits that are at least as good as, or even better than, the Medicare plan you’re considering waiting on. With this kind of coverage, you can put off joining Medicare without getting any fines for joining late. Usually, with creditable coverage, you can wait to sign up for Medicare Part B and Part D.

Do Medicare Supplements have penalties if I don’t take one?

Medicare Supplements like Medicare Advantage plans are optional. Due to this, they don’t have penalties associated with a Medigap plan.

However, if you don’t elect one when first starting Medicare, you’ll be subject to medical underwriting in most cases.

Mandatory Medicare for government employees

After March 31, 1986, Medicare is required for anyone hired or rehired as a state or local government employee. Those covered by a Section 218 Agreement already receive Medicare benefits.

Government employees qualified under the Medicare program do not earn Social Security payments for their services. Still, they must pay both the FICA and voluntary parts of Medicare.


Do I have to use Medicare when I turn 65?

You aren’t required to go on Medicare when you turn 65. You may be penalized if you choose to decline or delay Medicare when first eligible.

Is Medicare required for people with disabilities?

No. After 24 months of being on disability, you’ll qualify for Medicare. Suppose you choose to decline Medicare and don’t have creditable coverage. In that case, you could be penalized should you choose to start Medicare late.

Is Medicare required for veterans?

No, but it’s recommended. Most veterans we speak to love VA insurance. However, they could be missing out on additional benefits at no cost to them. In addition, if they move and aren’t close to a VA, they could have problems getting care coordination.

What is the penalty for Part A if I don’t take it?

If you don’t sign up for Part A when you are first eligible for Medicare, your monthly premium may increase by 10%. You’ll pay a higher premium for twice as many years than the years you delayed paying.

What is the penalty for Part B if I don’t take it?

If you don’t sign up for Part B when you’re first eligible, your monthly premiums may go up by 10% for every 12-month period you could have had Part B but didn’t sign up. In most cases, you’ll have to pay this penalty each time you pay your premiums for as long as you have Part B.

What is the Penalty for Part D if I don’t take it?

Medicare charges a penalty if you don’t have Part D or creditable coverage for several months. The penalty is calculated by multiplying 1% of the national base beneficiary premium times the number of months you didn’t have Part D or creditable coverage.

What is the Penalty for Medicare Advantage if I don’t enroll?

Medicare Advantage, or Part C of Medicare, is optional and doesn’t have a penalty.

What is the Penalty for a Medigap Plan if you don’t enroll?

Medicare Supplements are optional insurance you can buy to fill in the gap in Medicare. Since they’re additional coverage for your Medicare, there isn’t a penalty for not enrolling.

Do you need help avoiding Medicare penalties?

Deciding whether to immediately enroll in Medicare or keep a different kind of creditable coverage is difficult. So let us give you free, expert help in making this crucial determination.

Our licensed insurance agents will review the options available to you and even assist you in deciding if a Medigap plan would be right for you.

Give us a call today to talk to our agents. Or fill out our simple online rate form to get the best rates in your area.

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Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.